Companies Act 2014 section 1399

Treatment of purchased shares

Section 1399 deals with the treatment of shares purchased by an investment company, requiring their cancellation and a corresponding reduction in issued share capital, with a special exception for umbrella funds acquiring shares in their own sub-funds.

• When an investment company buys back its own shares, those shares must be cancelled and the issued share capital reduced by the amount paid for them.
• An umbrella fund may acquire shares representing other sub-funds within the same umbrella fund, either by subscription or by transfer for consideration.
• Such cross sub-fund acquisitions must comply with conditions imposed by the Central Bank under section 1396.
• The exception does not apply where the acquisition is a redemption at the request of the shareholder out of the company's assets, as described in section 1386(1)(b)(ii).